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Keep Taking the Tablets
Ever since the iPad launched in April 2010 tablets have become the hottest segment of the tech business. At a stroke Apple created a whole new market, while simultaneously destroying another - netbooks (remember them?)
And almost from day one the rest of the PC industry has been playing catch-up. So how are they doing?
Strategy Analytics' report, “Global Tablet OS Market Share: Q2 2011”, claimed in July that Apple was rapidly losing market share, falling from 94% in Q2 2010 to just 61% now. It ascribed this to "a rising number of competing software platforms,” claiming that “Android captured 30 percent share of global tablet shipments.” Simple maths therefore tells us that the other tablet platforms - HP's WebOS, RIM's QNX, etc - had a combined share of 9%.
Forrester's new report on the European tablet market, published this week, reckons that despite all this competition Apple "still has 70% market share for tablet sell-through to consumers." And they helpfully point out that ‘sell-through’ is a different measure to ‘shipments’; according to their interviews "non-iPad inventory is sitting in the channel - i.e., manufacturers are shipping more tablets than consumers are buying." This is not a problem Apple has, as demand consistently out-strips supply.
But what about actual numbers, as opposed to market share? In the 5 quarters Apple has reported since the iPad launch it has sold (to customers) 28.73 million units. Annoyingly, Google doesn't report Android sales but it does report the number of device activations, broken down by software version. Honeycomb, version 3 of Android and the one developed specifically for tablets, accounts for about 0.9% of the 135 million currently active devices. Even allowing for some tablets running Gingerbread (v2.2) or Froyo (v2.1), iPad is out-selling Android tablets by something like 20 times. And the rest are, frankly, nowhere in sight.
Looking forwards, can Apple keep that lead, or will the competition inevitably catch up?
Maybe, but remember that when Apple launched the iPod and revolutionised the mobile music market everyone thought it was only a matter of time before the established players - Microsoft, Sony et al - would produce an "iPod killer" and put Apple back in its place. But 10 years on, Apple still commands the music player space and the company that finally produced an iPod killer was, er, Apple itself with the iPhone.
To support the iPad Apple has the advantage of a mature and thriving eco-system, most notably the App Store. Whatever it is you want to do with your tablet, be it games, social networking, productivity, music, drawing or whatever, "there's an app for that." To compete a tablet manufacturer needs to provide customers with access to plenty of high-quality third-party apps and fun games, along with an integrated payment system, not to mention a well-stocked music and video storefront, widespread retail availability and customer support, and an assortment of good first- and third-party accessories. Oh, and data integration and synchronization with both Windows PCs and Macs needs to be a breeze.
Of course, all that might be overlooked if someone could come up with a cheap and cheerful device at a super-competitive price. But, as Forrester points out, the " iPad competitors’ prices are too high." Even with the benefit of a free OS (Google's Android) manufacturers don't seem to be able to put a product into the market at less than the iPad's £399. From being a boutique and high-priced vendor of PCs Apple has become a producer of mainstream consumer products at prices that can't be beaten.
Analysts are projecting iPad sales of 40 million units this year. Added to the existing base that's a big, big lead for Apple. In fact, one might be tempted to say that there's no such thing as a tablet market - just an iPad market.
Image with thanks to Yutaka Tsutano
